News in South Africa 24th March:
1. 21 Day Lockdown Announced:
South Africa will be placed on a 21-day lock-down starting on Thursday to curb the spread of the coronavirus, President Cyril Ramaphosa announced on Thursday.
The lockdown will shut down most South African industries, aside from essential services in safety and security, food and distribution and telecommunications and electricity.
Ramaphosa said the number of coronavirus cases in the country, currently at 402, will rise in the weeks ahead, and that the aim of a lockdown is to slow the spread.
Ramaphosa said the lockdown will last until April 16. Individuals, aside from those in essential services, will be forced to stay at home and only be allowed to leave for medical treatment, or to go buy groceries.
The South African National Defence Force (SANDF) has been deployed to enforce the new regulations, Ramaphosa said.
2. Economic interventions in place:
President Cyril Ramaphosa has announced a raft of “quick and targeted” economic interventions, including a solidarity fund run by the private sector, promises of increased assistance to small and medium-sized enterprises, and tax subsidies of up to R500 a month for some workers earning below R6 500 a month, in an effort to buoy SA’s economy.
This comes as countries around the world scramble to pass economic rescue packages as the impact of the virus severely constrains economic activity, causing stock markets to plunge and layoffs to surge, as analysts warn of a global recession.
Here are the key announcements in what the president called the “first phase” of the state’s economic interventions.
- Ramaphosa said a solidarity fund has been established to help support vulnerable South Africans. The fund, which will complement the state’s work, will accept donations from businesses, individuals and members of the international community. Ramaphosa said the fund will focus on combating the spread of the virus, help track its spread, care for the ill and “support those whose lives are distributed”. “Anyone can begin to deposit funds into the fund from tonight,” he said. The state is providing seed capital of R150 million and the private sector has pledged to support it, he added.
- Ramaphosa said the Rupert and Oppenheimer families had pledged R1 billion each to support small businesses.
- The president said a safety net is being established to help people in the informal sector. Further details will be announced later.
- The president said the state was working on a special dispensation for companies in distress because of the coronavirus. Under this proposal employees could receive wages via a temporary employee relief scheme to let companies pay employees directly. He did not provide further information.
- Ramaphosa said many large companies have accepted their responsibility to pay affected workers, and called on large businesses to take care of their workers.
- The state will consider utilising the reserves of the Unemployment Insurance Fund to extend support to workers in small and medium-sized enterprises and vulnerable firms faced with loss of income. Details will be made available in coming days.
- The state will provide a tax subsidy of up to R500 a month for four months for private sector workers earning less than R6 500 a month. He said this would help up to 4 million workers.
- The president said tax-compliant businesses with a turnover of less than R50 million would be allowed to delay 20% of their PAYE liabilities over the next 4 months, and a portion of their provisional corporate income tax payments over 6 months. This is expected to assist over 75 000 enterprises.
- The state is exploring the temporary reduction of contributions to the UIF and the Skills Development Fund.
- Commercial banks have been exempted from provisions of the Competition Act to enable them to develop common approaches to debt relief and other necessary measures, said Ramaphosa.
- The Industrial Development Corporation has put a package of R3 billion together for industrial funding for vulnerable firms and will seek to fast track financing for companies critical to efforts to fight the virus.
- The Department of Tourism has made R200 million available to assist small and medium-sized enterprises.
- The Department of Small Business Development has made R500 million available immediately to assist assist small and medium-sized enterprises.
3. JSE in a tough spot:
The JSE had another tough day, giving up almost 5%. Overnight, Wall Street fell despite a new plan by the Federal Reserve, that will involve lots more bond buying.
4. Rand on unsteady feet:
The rand slumped to R17.85/$ yesterday amid the global volatility, but was last trading at R17.66.
5. Peter Moyo appeal dismissed:
The Supreme Court of Appeal has dismissed an application by former Old Mutual CEO Peter Moyo to appeal a judgment which overturned an earlier interim order temporarily reinstating him to his old job as the head of the financial services company.
Moyo was fired by Old Mutual in June 2019. A High Court judge ruled in July 2019 that Moyo’s dismissal was unlawful and ordered that he be temporarily reinstated, leading to a drawn out legal battle. In January Old Mutual won its appeal against the ruling.
The SCA, in the latest ruling, found that Moyo’s case had no “reasonable prospect of success” and ordered Moyo to pay costs. The ruling is a fresh legal defeat for the embattled former executive, after he also lost a bid to interdict Old Mutual from hiring a permanent CEO pending the appeal of the January ruling which found his dismissal was lawful.
Old Mutual on Monday hailed the ruling “as another important step forward in ending the litigation” mounted by Moyo against the company.